No Foreign Transaction Fee Credit Cards

Roughly 90% of all credit cards charge a 2% - 4% foreign transaction fee for any purchase processed outside of the United States. Such unnecessary, high costs can add up quickly for an international traveler or shopper, so it’s a good idea to consider the increasingly popular category of cards that do not levy foreign fees. Capital One and Discover have removed foreign transaction fees from all of their cards, and in recent years others have responded by introducing a number of new offers without such charges.

By using one of the following no foreign transaction fee credit cards…show more (some are issued by CardHub sponsors), you’ll not only avoid international surcharges, but you’ll also save at least 6.73% on currency conversion, since Visa and MasterCard automatically provide exchange rates that are much lower than you’d get through a local bank or an airport kiosk. Just make sure to inform your credit card issuer about your travel plans in order to prevent card use from being suspended due to fraud concerns.

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Expert’s Answers

What is the cheapest way to convert currency?

By: Odysseas Papadimitriou, CardHub CEOAccording to CardHub’s Currency Exchange Study, a credit card provides the cheapest form of currency conversion. As long as you’re using a credit card with no foreign exchange fees that is on the Visa or MasterCard network, you’ll save up to 7.9% and 14.7% on currency conversion relative to cash services offered at local banks and airports, respectively. Besides being cheapest, credit cards also provide the simplest means of currency conversion, given that it’s done automatically upon a purchase being made.

Please keep in mind that 90.2% of all credit cards have an average foreign transaction fee of 2.45%, according to CardHub's data. That’s what makes planning ahead and getting one of the credit cards with no foreign transaction fee so important. Capital One used to be the only real player in this niche credit card category, but a number of other major issuers--including American Express, Chase, Citi and HSBC -- have since started offering credit cards without foreign transaction fees.

What is the best no foreign transaction fee credit card?

By: John Kiernan, Personal Finance EditorThere isn’t really a single best no foreign transaction fee credit card, as how good a card really is depends on how well it fits your particular needs. Therefore, the best no foreign fee credit card is the one that not only meets your credit standing, but also allows you to maximize your rewards and thereby garner additional savings on top of the 2-3% you’re already saving in foreign fees. In addition, it is important to get a card on the Visa or MasterCard so that your card will be accepted in the highest number of global locations.

Will my credit card work outside the U.S.?

By: Odysseas Papadimitriou, CardHub CEONo special type of credit card is needed to make international transactions, though a no international fee credit card is necessary to avoid the 3% fee, that the vast majority of credit cards charge on any purchase processed outside the U.S. Whether a credit card will work in a given country solely depends on which of the four credit card networks it belongs to (i.e. Visa, MasterCard, American Express and Discover). Visa and MasterCard are accepted practically anywhere a credit card can be used worldwide. American Express’ reach is far less but still significant while Discover can only be used in about a quarter of the countries and territories that accept Visa and MasterCard outside the U.S.

European countries are increasingly moving away from the magnetic stripe credit cards used in the U.S. in favor of chip-and-pin technology. As a result, while you will be able to use your U.S.-issued credit card 95% of the time, you may be unable to use your card at some vending machines and automated kiosks in airports and train stations. Depending on the country, you might also need to show your passport for proof of identity when using a credit card or debit card.

What are chip-and-pin credit cards?

By: Odysseas Papadimitriou, CardHub CEOChip-and-pin credit cards are becoming the standard in Europe, Canada and Japan. The main difference between them and the magnetic stripe cards we use in the U.S. is the fact that chip-and-pin cards provide better fraud protection by adhering to global EMV standards. This heightened protection is due to the fact that a consumer has to input a Personal Identification Number (PIN) that must match data stored on a secure microchip embedded within the card for a transaction to be authorized. Some U.S. credit card companies are beginning to offer chip-and-pin cards as well as chip-and-signature cards and chip-based contactless payment methods. Therefore, global credit card interoperability appears only a matter of time. In the meantime, regular credit cards with no foreign transaction fees will be sufficient for all purchases made abroad.

"Currently American cards do work in most places," says Eldad Boker, a professor with Johnson & Wales University’s Center for International Tourism. "Europe and Asia are moving rapidly toward a chip based card, which in the next few years will become a challenge for American tourists traveling without the chip based cards. Many automated kiosks in Europe already do not accept cards that are not equipped with the chip based technology. (Ex: Train and bus transportation system, some banks and others). With the spread of this technology to other parts of the world, the American tourist will need to request chip based card, from the issuing banks. A tourist without this type of a card will face many more challenges than a tourist that carries a chip- based card."

Indeed, transactions made at unattended automated kiosks, such as those in train stations, may necessitate a chip-and-PIN card, as not even chip-and-signature cards will work given their lack of a PIN for identity verification. But very few U.S. banks offer chip-and-PIN cards, and you can get around the unattended kiosk issue by simply taking a debit card with low international withdrawal fees along with you.

So, the standard magnetic stripe credit card will do the trick for now. That might change in a few years, but don’t worry, when chip cards become a true necessity it will be a big deal and you’ll hear about it.

Tips for using your credit card abroad:

By: Odysseas Papadimitriou, CardHub CEOThere are a number of things you must do before using a credit card abroad, including:

Get a no foreign transaction fee credit card before booking flights, hotels, etc. associated with an international trip. Do so as soon as possible because foreign transaction fees will be assessed for any purchase processed through a foreign merchant, even those you make before departing.

Call your credit card company in order to notify them of your international travel plans and ask for a toll-free number to call in case you encounter problems. If you don’t tell your card issuer that you’re going to a particular country, your card will not work there.

Keep your account number and credit card company’s phone number somewhere safe, because if your card gets lost or stolen, you’ll need both in order to get a new card sent to you.

Some countries may require identification in order to authorize a U.S. credit card transaction so don’t forget your passport when you go shopping.

At the checkout counter, decline any merchant’s offer to convert prices into U.S. Dollars, so you don’t fall victim to Dynamic Currency Conversion (DCC). "Some tourists are happy to know the amount they will be charged in US Dollars. The reality of 'knowing' the exact amount they are charged in US currency, is considered by some, to be ‘a value added’ service,” Professor Boker said. "Other customers react to the DCC phenomena in disapproving manner. When they realized that at Point of Sale (POS) the charge on their purchases is higher than what the credit card company would have charged, they are disapproving of the practice. Many react to this ‘revelation’ by suggesting that it was a ‘one-time thing,’ and from next trip on, they charge purchases in the local currency."

What about cash?

By: Odysseas Papadimitriou, CardHub CEOWhenever you travel abroad, it’s a good idea to have cash. While the level of importance obviously depends on how developed the country you’re visiting is (the more developed, the more merchants that accept international credit cards), it’s inevitable that you will find yourself needing to make at least a few cash-only purchases (e.g. cab fare). So what’s the best way to go about getting it? Well, for starters, do not even consider using a credit card for a cash advance, as this will be very expensive, in light of the cash advance fee and APR. Your best options are a debit card or an ATM card. As these cards also come with foreign transaction fees, it pays to shop around before opening one.

Community Discussion

I live near the Canandian-United States border, and choosing a card with no foreign transaction fee really simplifies currency exchange and shopping during casual jaunts to Canada. It also makes things simpler when planning longer trips and shopping through foreign outlets online. Although this perk may not be necessary if you tend to stay in one place, I recommend you get at least one card with no or a minimal foreign transaction fee if you live close to the border or regularly travel offshore.

I am really glad to have a card that does not give me a foreign transaction fee. I traveled before and had to deal with the fee and it was awful, especially at the ATM. I would get charged an extra ten dollars for taking out some money. I have a Capital One card and I am very thankful for it, as it has given me the ability to avoid getting fees from overseas.

I don't travel that often, but seeing as my parents live in South America (and I'm in the USA) I do have a special VISA that I have ONLY for the convenience of purchasing thing in Chile. I do always call Capital One and let them know I'm going out of the country, just in case, but I've had no issues with the card. The first time I went out of the States I had to learn a hard lesson. I used my card all over Chile, and I raked in a ton of fees, so now I have my little Capital One Visa card whenever I go see the parents!

It may seems useless to get a card without any foreign transfer fees if you do not travel often. However there are some benefits even if you're not a traveler. For instance, it may be useful while ordering from certain foreign websites. I do a lot of shopping online and I always make sure to use my Capital One card to check-out and avoid fees. Of course, if you are a traveler, it's very important to have that kind of cards, you don't have to worry about fees and can enjoy your vacation more.

I doubt that I have any cards with transaction fees. If I do have them, I do not use those features at all. It seems pointless to get a card with a transaction fee. If I am going to be traveling, I make it a point to check my card terms and find out about any potential foreign transaction fees.

I can see where a credit card without any foreign transfer fees could be beneficial for those who can and do travel often. For those of us who do not have the means or opportunity to travel outside of the country this feature is almost worthless and I would not choose a card solely upon this feature being available, it is just not important to me.

Credit cards without foreign transaction fees are not just for frequent travelers, especially in this day and age. They're not just for travelers, period. I do a lot of online shopping from European-based fashion retailers. I didn't realize this until checking my monthly statement that my bank (Bank of America) charges a 3% foreign transaction fee, even though I ordered in USD. Now I always make sure to use a Capital One card that waives the fee. I think it's a good perk to have, even if you don't travel internationally.

At times, when obtaining a credit card, individuals tend to disqualify a feature, because they feel that the feature will be of no benefit to them. However, I have had the unfortunate experience of having a credit card that did not have foreign transaction fees, and let's just say, not having the feature really cost me. I certainly learned a lesson after having the fees from ordering internationally constantly piling up. I certainly realized I was much better off having a card with the feature, than having a card without the feature. I learned a very expensive lesson that I learned.

You would THINK that you don't need a card without foreign transaction fees maybe because you don't travel oversees much or something of the like. However, even something as simple and innocent as ordering from a FOREIGN website could come with a transaction fee if you make the mistake of getting a card that does not fee you for foreign transactions. It's much better to be safe than sorry, even when you think that you won't need it.

Having no foreign transaction fees can be way more important than some people realize. I never travel internationally but I order supplies for my business from overseas and my old card always hammered me with Foreign transaction fees - even when ordering from Canada. The couple of bucks here and there added up to nearly $100 in fees in one year. So this card is definitely a smart choice if you even buy anything internationally.

When I am traveling I always make sure to only use the credit cards that I have that also do not require transaction fees. It really helps me have more money to spend on the fun things, when I am not being charged a bunch of fees that I will see on my monthly bill when I return home.

I do believe that cards without transaction fees are great, even for people who don't travel a lot. If you are like me, you have one central spending card which encompasses all of your habits, whether it be travel or restaurants, or online purchases. To have the ability and option of the non-foreign transaction fees, in the event i decide to take a trip, is just one more added feature I get to benefit from.

Cards without a foreign transaction fee are great for someone like me who travels abroad a good deal. However, I don’t think that they are specifically and only for people who travel frequently though. The customer service on these cards tends to be great, and sometimes they come with various rewards and perks such as earning airfare miles or hotel stays.

I believe it is beneficial to receive credit cards that don't require transaction fees. As much as I use my credit card, the lack of transaction fee helps me save a great deal of money over the course of time.